Transcripts For CNBC Closing 20240704

Finally closing in on its former record. That goes back to the very beginning of 2022. It is going to complete that market that the average stock has not been participating. Nasdaq positive, work in the second three alltime high. Momentum chase in semiconductors refuses to quit for now. Nvidia surpassing two trillion dollars in market cap as dell, strong results after close yesterday triggered a feeding frenzy along the have we changed. Gained despite continue Malaysian Apple shares. And regional banks and related to nerc regional bank. That brings us to the top of the take. How hot is too high on the verge of the market . Lets ask cameron dawson, inouye wealth chief investment officer. We have momentum. There is nothing you can deny about that. On the other hand the s p 500 is 13 or 14 above its twoday average. It is looking stretch throughout these different metrics. We can go bass and say, january, february, things tend to follow through to the upside. It felt like this was the week when folks stopped fighting in started chasing. Certainly. Momentum is a beautiful thing. It is a question of, how long can it last . Clearly there is also an asset of earnings. The optimism around that being that you are starting to see earnings estimates get revised higher. Interestingly not for 2024, just for 2025. Things are getting more back and loaded. Momentum is causing this chase, causing this big rally higher. To your point, the question is, when does positioning get so extended that it cannot go any further . We are not quite at the point where we are at extremes like we saw in early 2021 or 2018, which does suggest things could go further. Exactly it is worth remembering, i guess, as much of the themes we are up a ton in a short period of time the s p is up like 7 from like two years and two months ago. In other words we are not that deep into record territory. You mentioned the earnings picture. It is easy to say in retrospect, but nbcs numbers name of the market to say, okay, we dont have to work. We dont have to worry about another three months about the astoria completely falling apart in terms of supply constraints. And the pc inflation number yesterday was good enough for people to say okay we have another month before we have to worry about Something Like that. At least another couple of weeks until cpi. You are out on top of it the pmi today, the surprise to the downside. You would normally think this would be bad for the earnings picture. A good correlation to pmi and earnings growth. However, it eased some of the pressure on the expectation for a more hawkish fed. You saw that pricing, costs start to go higher again. That maybe some of the things providing another lift. Yes. And we will definitely get to the fed picture. The question as you mentioned, it does not seem that we are extreme extremes. I agree with that. In terms of overall exposure and flow it doesnt seem like people are really going crazy throwing money at the market. You are starting to see the speculative fringes come to light. What is happening in crypto and all the rest of it. It is more r than science figuring out when that is really gonna come to. I look at the options market. We have seen very aggressive behavior in the options market. You can guy protection for two very cheap right now captured an options q. There is no demand for downside protection. A lot of demand for upside optionality. The problem with positioning, or the challenge of it, it is never a great timing tool. It is a great time tool to the downside than it is to the upside. It can persist. We are watching these flows, we are watching a i stock allocations. All of these things are getting closer to the extremes. Just not quite yet. Sure. Absolutely. All that stuff i watch. If you want to go back to the range that we played in the late 90s. Things can get a lot not here, i guess, before you had to worry. Lets go back to the fed. Want to bring into the conversation senior economic correspondent, steve liesman. Pretty busy morning, steve. Speaking to todd burke, chicago fed president austin mosby, knit it together in terms of what you discern as the current state of thinking on the fed for when, how much, and what this economy does and does not need. Mike, i want to bring you through a little tale of the tape and show you how my general take on the fed is they are all out there being hyper gain independent and the market is, as well. I doubt you will hear anybody, being very dogmatic about the direction of policy. First lets take a look at the ten year. The ten year shut up this morning. People said, the comments that bark in gave us, i will play those comments in just a second, and then it came back down. Lets hear first what bark in had to say. He is in no hurry to. Cut it is an important time because the overall numbers are likely to come down over the next few months because the comps from last year went very good. It is a rounding over. We are losing those high inflation cups. We have a shot here to bring inflation down very close to our target. On the other hand, if the monthly numbers come in at a level inconsistent with where we are going, that will tell us something different. You dont sound like you are in a rush to cut rates. Im never in a hurry to make any decision. So, okay, he says that. We have the shoot up you can see that in the ten year. That seems to be where its supposed to be. Take a look at the data they came out. Mike, i think you are there at 10 00 or if not shortly thereafter. Three data points all of them coming in below expectations. There is the actual, there is the estimate. What happened to race . They came down. Basically a makes a hawkish comment. The market disregards because they know the fed is following the market. They are not all that dogmatic about the direction of rates. Another sad february placing report, we will be talking about a different scenario. Inflation comes in in february, my guess is those cuts are back on the table, perhaps remain, certainly for june. For sure. And just for the record, i am always here whether i am on camera or not. I was absolutely watching. I know that. [laughs] i want to ask why the market seems okay on this. It doesnt feel that there is any emergency to be responding to. The only reason you would be concerned that the fed is in this way and see mode is if you feel the strong economic numbers are ahead fake, or they are going to quickly turn for the worse, Something Like that. It doesnt really seem like that is quite front and center as a concern. Mike, you know why the stock market is acting better than i do. I will throw out for reasons for you to chalk down. One, the set is not hiking here. There is some talk about that but i dont think the fed is in a position where it is going to be hiking interest rates. If it does anything it will allow rates to remain higher for longer but not raise them further. I think that creates a certain stability for the stock market to last you to say, okay. I know what my bogey is. Now its gonna be these five and 38. Maybe go down to 46, thats my estimate. I can invest and make sense of the world in the future in that regard. Secondly, the fat is talking about the possibility of reducing the bounce she runoff. That is a potential positive. Third, mike, as you know there has been a lot of really negative headlines from the middle east and other places. The worst does not appear to have come to pass. Though all of this happening i think the fed is in context of a lot of things. The set is something you would put in the context of, the worse has not happened yet from the fed. We might not get the cuts. We are probably not getting hikes either. Absolutely. Agree all across the board there. History says a slow easing cycle is more favorable for stocks then a fast one. Obviously that usually means things are going wrong. Steve. We appreciate. Have a great weekend. Lets continue talking about this. Shannon, give us your take on how the market has been able to respond to some of the chief complaints, or maybe warning signs, people were throwing out at the beginning of the year. This market is on the up here because the fed is going to cut soon, and. Deep or number two, the market is too narrow and it cant sustain itself a few of these big stocks fall away. It has managed to power through both of those things. [inaudible] we dont have shannons audio. Okay, cameron. Lets just pick it up right there. The sense out there that we are not as fed dependent, perhaps, because what the economy is okay. What you said about earnings, is that something we can actually be comfortable with . I think that is a 2025 problem. It just means you start refinancing in the 2024 and 2025 in a much bigger way in the higher rates. If you dont get rate cuts and you have to refinance at these high rates, that is when you start to see the pressure and pinch much more so on broader Balance Sheets. The fact that the fed is not hiking more certainly helps. The problem if they dont cut becomes an issue more in 2025 and it will be today. We did just see, in february, Something Like 200 million in corporate debt issuance. The market just completely absorbed without a hiccup. It seems as if, right now at least, we have the conditions where you can allow the current level of rates to get locked in. We are okay with it. Look at credit spreads. They continue to come in a very meaningful way. High yield spreads are now at a level that we have not seen since 2021. Not back to 21 lows but they are extraordinarily tight. Its essentially saying the bond market is not concerned about growth, not concerned about economic weakness. If rates keep going up, and you see all of this refinancing you can say, hey, credit spreads could move higher. Which would be a key risk as we get into the second half of the year. For sure. Credit is not giving a reason to worry. I guess bringing it down to a practical level here, s p is up almost 8 on the first report of the year. You clearly have elevated valuations, like a lot of cell side firms you want to try to nationalize them or maybe they are a little bit too rich. What would you do have in terms of within the market at this point . You have high momentum growth stuff. Some of the other areas are starting to come around. What we have been saying is we want to let our winners ride. If we have growth positioning, we are not at the point yet where we are trimming. Valuations, yes, or extended. Trends are strong, momentum is up. When we are looking for new capital to put to work, that is what we are looking for. Areas closer to the beginning of their upcycle. We are picking out a value. We are not buying value indices. We are being very selective because there is a lot of junk in those indices. We are finding opportunities within small caps, within international, where we do not have as much valuation risk because if the liquidity tide turns against three and one as much room to fall evaluations. Which is why we are being very careful on chasing growth too much. I guess we should bring up this new York Community bank issue. It seems somewhat idiosyncratic. It has been from the beginning. But it has been exacerbated right now. Obviously the stock is showing greater concern about this particular institution. Regional banks, Community Banks of the group are down 9 on the. Day not any kind of panic but i do wonder if there is a shadow over the heart of the market. It certainly seems in a sense if you look at the care, even individual regional banks, what you see is they rallied a lot in the fourth quarter. They rallied right into resistance, rolled over, and are continuing their downtrend. It just means there is not a lot of confidence that we are turning a corner on the earnings trajectory. I think for new York Community bank to question Going Forward will be, what does the deposit base look like . All of these headlines have been very negative. I think we need to watch very closely the deposit trends. This is, of course, the 2023 issue. We have been thinking about it much. But the next question is, what happened to be dfp. The fed effectively set, we are ending this program. What does this mean for the Balance Sheet . Exactly. Shannon, i hope we have you here. I would love for you to weigh in and say, what do you do with this gift of a market that doesnt want to quit . Making new highs. It is, essentially, pulling in a lot of former skeptics. I think it is pulling in a lot of former skeptics because we have been waiting for the broadening out that we experience in february, mike. We look at the dispersion. I think there was a lot of concern about that dispersion in the super seven, magnificent 7, top ten stocks because we were concerned about what that would do from an overall earnings perspective of the s p 500. If you look underlying, there are a lot of sectors that are starting to participate in this market. Companies participating in this market that did not in 2023. If you think about the opportunity to take advantage for areas like industrials, health care, even places like reits. Those are companies that have an opportunity to generate higher growth margins and have an opportunity to have some of that margin recapture, grow the bottom line. Even with topoftheline starting to come down just from disinflationary trends. Also even in the event, which we do you think will happen, we will continue to see some slowing of the economy. Those companies from evaluation perspective are more attractive. You are pulling in the skeptics. They see this broadening out and this real divergence and bifurcation of those Top Companies as a positive, because it is an emphasis on fundamentals and companies that are gonna continue to be able to drive earnings growth. Maybe not at the levels of a thought for this year, what we were integrating. But to camerons earlier point, we are seeing increased expectations for 2025. There is a little bit of a longer tale on this, as well, for investors who are looking outside of what happened last year. Good things, even if they are far on the horizon, like a potential rate cut or accelerated earnings growth, they can work for the market to give something to look forward to for a while. We will see how it goes. Shannon, we appreciate it. Cameron, great to see you. Everyone have a great weekend. We have just Getting Started here up next, a big move by boeing. New reports everything the company is interested in buying back Spirit Aerosystems. What it might mean for boeing and its stock price, top analyst and defense specialist sheila kyle b will be here. We are keeping a close eye on nvidia to close above the two trillion dollar market cap for the first time. We got you covered live from the new york stock exchange. You are watching closing bell on cnbc. Whoa, how did you defeat them . With a little kung fu strength and by connecting my devices to the most powerful force of all. Skadoosh. Hah, huh . Cool right . Amazing. Harness the power of xfinity internet and stay connected to the things you love. Ah, theyll be like this for hours. Hello dad, hello dad, hello da. Uhoh. Good bunnies. Ahh shares of Spirit Aerosystems turned after talks that boeing is set to acquire the struggling fuselage maker. It has been at the center of quality issues affecting boeing 737 max. Gastronomy now to discuss is sheila kyler of jeffries. Sheila, good to see. Put it in perspective what is the presumed business logic here of bringing the supplier inhouse . In a Perfect World boeing would operate by itself. Spirit would be an out source supplier of fuselages. They would each enjoy profits and go along with their business. Clearly de calvin has soft and his tone over the past few months given the issues with the last caroline instead and. It seems like spirit has to come in has to be better manage so with that ways a read that they feel the need to have more control . They have to show that they have their hands directly on the production and safety issues . How would it play . I think given the faa audit is in week 46, there is a doj investigation. There is clearly a lot of manufacturing mishaps going on. Boeing has to bring speared in house. We do not know the price facility which that, it could be a takeover or take under at this point giving the issue spirit has had. Spirit is also part of its business is a supplier to airbus, as well. The presumption is they would separate that out . About 20 of sales is to airbus. But that business is actually losing 20 million in cash of this year and 150 next. What do they say that for . Likely not much is our base case assumption. What do you do for the rest of boeing . We assume boeing takes the cogs inhouse. Take some about 10 per fuselage. They dont have to pay spear for, but obviously they have to manage that better and take on that working Capital Management wrist themselves. If you bottom line and terms of what it might need for boeing and financing the acquisition and what it means for their own earnings and cash flow . It depends on if they are gonna have to raise equity. They only have 16 and a cast on the Balance Sheet. Theyre gonna lose 2 million in the first quarter. That takes them down to 14. They need ten billion to operate. They dont know if they will have to rate eight billion in equity or eight billion in debt. We think we can do it with data and cash on hand. That takes into account the increased analysis or not. We pretty much think its the washed boeings Free Cash Flow at this point. If you want to be bullied quotes here in 1 million Free Cash Flow to 6 yield but essentially a wash. Right. You are really acquiring that Free Cash Flow. You are taking something in house that is being problematic to remove issues and two up and production. We think boeing is doing sub 20 maxes in february. They are trying to get 38 which is not happening. Where do you come down . Obviously this is a huge swing factor in terms of boeings evaluation. Where do you come down on in terms of the leg lets talk right now . We have big upside to boeing shares. It is all about the max getting up and three. Clearly spirit has been one issue after the other. Maybe taking it in houses the final solution to get you know we were at 20 and september. Somehow we are back in 20 max of the month. We were supposed to be at 30. Eight probably supposed to be a 45 by the end of the year. We are not there yet. A 50 move based on max ray. A 50 move to your price your price target and the max rate. Gotta. They are almost aligned with one another. Getting it pushed out, sheila good to see you. Thank you so much. All right, some news we want to get. Two federal governor cooler is delivering remarks of the 2024 Stanford Institute for policy research. Saying she is, quote, cautiously optimistic on progress on disinflation without significant increases to unemployment. We will continue to monitor and give her any headlines as we get them. Up next, cryptos wild week. Bitcoin surging more than 20 since monday. We will have bill miller iv breaking that out. He is forecasting a rally in the months and weeks ahead. Ckllilbeig wl rht ba. Power e trades awardwinning trading app makes trading easier. With its customizable options chain, easytouse tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. E trade from Morgan Stanley power e trades easytouse tools make complex trading less complicated. Custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. E trade from Morgan Stanley it has been a big week for bitcoin, surging over 20 with bitcoin etf seeing record high Trading Volume over the last five days, as well. Meanwhile, micro strategy surged over 51 this week alone after adding to its crypto stake now worth 11 billion dollars. Joining me now to discuss is bill miller the fourth of miller valued partners. He owns micro chatty. Bill, good to see you. Not only do you own a, in mid january when we spoke you spoke about the bull case. It has more than doubled since then. Obviously we know what bitcoin prices have done. Micro strategy a bit of a leverage play on it. I guess, what do you think at these levels . Where could it go . We absolutely love it still, michael. Thanks for having me on. It is our Largest Holding at about 14 and a half percent. It still has a massive runway ahead of. It is our position we are in the very early innings today of a massive capital repricing event. We are going to the digital pricing, capital is becoming digital. If you look at the data of big coin right now what you see is the realized capitalization, is very different, different than market cap, the realized capitalization a bitcoin. What the real life kept shows you is the price at which every last bitcoin is traded. That is 24,000 today. Why is that important . Well, it tells you the average bitcoin holders up honored and 50 on that with right now. It also tells you 500 trillion dollars a fee at right now has, im sorry, 500 billion of the hour right now has been converted into bitcoin. It has been repriced. There is hundreds of trillions of dollars of capital out there today. We are only at 500 billion being repriced into bitcoin. We are well ahead of it having event in april. This is a big position. The other advantage you have with micro strategy, not only from a business perspective in terms of being able to develop new technology and business is tied to bitcoin, you also get a really interesting Capital Allocation strategy. Michael sailor understands basic math. He understands very complex math but he also understands basic math on how to create more bitcoin poor share for their holders. Look at when they started buying bitcoin. They owned a lot fewer bitcoin pusher than they do today. Today they can still move the price between bitcoin and his shares in a really interesting and creative where they can create value for shareholders who are long term holders. That Financial Engineering absolutely seems like it is the basis, really, for how the company is valued. I do wonder, you sort of alluded to developing technologies using bitcoin, or block chain. It seems like that is the missing piece. My question is, do you need . It if you are talking about it being another asset class that is early and its adoption, maybe thats enough . It certainly is enough. It has been enough for a lot of people. It will continue to be enough, i think, for a lot of people. At the end of the day there are used cases around outside of just turning fiat into a digital ledger of transparency and trust. There will be additional uses long term. Again, i think we are still really early. Thats why its an interesting and Important Technology for people to hold in their portfolio. Just for the creation potential. Where are you in terms of assessing the rest of the market here . The equity market in terms of whether it is a fruitful time to be hunting for well valued stocks and companies, or not . You have obviously seen massive momentum thrust in 13 segments. Other stuff grudgingly coming along. And, of course, the economy has held up better than many thought. For sure. The economy is in good shape. We are always one hunted percent invested so we are finding good opportunities. There are still a lot of things in the Home Building space that are really compelling. Another big position is a Company Calls builders first source, we have owned that for a while. Its still a good value if you look at its position in the Home Building market. A dominant supplier to homebuilders. Their pricing power, their returns, the Free Cash Flow, it is still a really good thing to own that you combine put away for years. We love that. Another one we own is master hold on, let me pull it up exactly. Master brand cabinets. Look at the earnings potential of what this thing can enter in a few years, recently came public in an ipo. It just had a great report breaking out to an alltime high. Its gonna generate a lot of free capita few years and it does today. It trades at a really good evaluation. There is a lot of really good things out there to buy. I know you also have exposure in some specialized ways in financials. What would your general outlook be there . It is one of those deals where the market suggests we are mid cycle here. Maybe the fears about credit really deteriorating a little overblown. What is your current view of how things look . It seems like there is not a lot of sponsorship for anything outside of jpmorgan. Right. We dont tend to invest thematically a big sectors like that but we have individual pixie like in financial. Jackson financial 20 to 3 nap time for earning. 5 dividend yield. We have on that for a. While we love. Them another great chart but still cheap business. Brand of financial holdings. That is a unique one that we think has been well oversold and is actually worth a lot more longer term. We are stock pickers. We will buy individual equities. We are bullish on financials. Sure got you. As you mentioned, micro strategy 14 of the portfolio. I know you have the etf tracking, that as well. Folks can check it out. Bill, created. Thank you very much. Thank you, mike. Up next, we are tracking the biggest movers as we head to the close. Christina standing by with us. Hey, christina. Investors are worried about customer demand for one cybersecurity firm. And meta shares are soaring double digits i will tell you why after this very short break. Hi, im sally. Im from phoenix, arizona. Im a flight nurse on a helicopter that specializes in trauma. Ive been doing Flight Nursing for 24 years. As you get older, your brain slows down and i had a fear that i wouldnt be able to keep up. I heard about prevagen from a friend. I read the Clinical Study on it and it had good reviews. Ive been taking prevagen now for five years and its really helped me stay sharp and present. Its really worked for me. Prevagen. At stores everywhere without a prescription. Wall street forecasts over 100 billion in sales for antiobesity drugs known as glp 1. But these treatments are largely administrated through cumbersome injections. Enter Lexaria Bioscience with their patented oral delivery technology. Early studies were glp1 suggest reduced side effects and better blood sugar control with reduced spikes. Lexaria bioscience. Transforming the future of glp1 drug delivery. grunting at Morgan Stanley, old school hard work meets bold new thinking. laughter at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit. New world ideas. Morgan stanley. 24 minutes until the closing bell. The s p holding in record territory. Nasdaq up 1 . Lets get back to kristina for a look at the key stocks to watch. Data infrastructure form, not, app store today after earnings be in strong got into the companys fiscal fourth quarter. Management really talking about a backlog in there is flash stores business. Improving and Market Trends which includes talked a. I. Similar comments we also got from dell impure storage. That is glacier 19 . Cybersecurity company, zscaler, having a tougher day. Shares slipped despite coming out of a wall street expected for security to. Analysts expecting weak guidance which imitates a year over year slowdown in billings growth for the company. That is why shares are down almost 10 . Dont miss an exclusive interview with these gather ceo in the next hour on closing bell overtime. Mike . Christina, thanks so much. We are keeping a close eye on the s p in this stack. Both now on pace to announce record butcher of next hp sees match cashmere and why he doubled downgraded Global Equities last month and where he stands right now and heading to a quick break getting another check on shares of nvidia it is on track to close two trillion dollars a market value for the first time we will keep you up to date on that move now up three and a half percent as we head towards the clothes we will be right back. Of aruba . Huh. This listing is misleading. Well, when at t says we give businesses get our best deal, on the iphone 15 pro made with titanium. We mean it. Amazing. All my agents want it. Says here. inviting pool. Come on over too inviting. Only at t gives businesses our best deals on any iphone. Get iphone 15 pro on us. oh, its cold outside. Time to protect your vehicle from winters wrath. Of course, the hot sun can be tough on vehicles too. You need weathertech. Laser measured floorliners and cargo liner will shield the carpeting from sand and snow. For your interior, theres seat protector and sunshade. Plus, mud flaps and bumpstep for the exterior. While the new impactliner, with shock absorbing rings, safeguards your truck bed from costly damage. Order American Made products at wt. Com surfs up we are getting breaking news. Hi, mike. Yes i was able to confirm with a person familiar with the melee or the valuation that reddit is targeting in its ipo, of course this is a closely watched one for being one of the biggest this year, im told it is planning to target a price range of 31 to 34 per share. That would imply fully dilate evaluation as high as six and a half billion dollars. I reported earlier that they were looking to target between five and seven billion dollars but the narrower target valuation has to do with some communications surrounding one unique aspect of this deal, which is that employees will be able to sell shares in this ipo. Part of this has to do with some communications surrounding employees declaring whether they do intend to sow. If they do, some information regarding that decisionmaking. Of course this is still fairly early in the process that road show is not imminent. The s one needs to be public for several weeks before they start officially marketing the deal to investors with a price range, evaluation range, before ultimately debuting. That range could be adjusted between now and then. At least in the near term that targeted ranges near 34 share implying at six napanee and our valuation, on a fully diluted basis, would represent a discount to the ten billion dollar valuation from 2021. Guys . Lastly, itll be an interesting test of a mostly dormant ipo market for growth companies. We appreciate that. The s p 500 and nasdaq again on track to close at record highs after hitting fresh day highs earlier in the session. The nasdaq suppressing its 21 record as investors make up tech is still the best way to slowing inflation in the abdomen. Joining me now is hsbc global researches max kick near. Max, great to have you on. We want you to take us back through how youre thinking about things starting the year and where it has brought you right now. We were bullish in 2023, correctly so. We thought maybe we will get some payback, it didnt happen. Thanks for having me. Look, that is exactly right. We started the new year, basically thinking [inaudible] as a relates to the allegations i understand youre on a physician as well as you have this extra kicker of the excitement around a. I. Technology. I guess where it is that lead you now in terms of positioning . Do you say, well, we missed the move . We are still cautious. R is a time to play . I think we missed the move. We definitely miss the move. Particular inequity in the high will turn over. The emerging market debt we are cautious with the emerging market with the debt side. That is a question of the we have gone fullon maximum overweight with credit once again, just like last year. We look for example the high yield to the next refinancing wave only really comes in the Second Quarter of next year. It doesnt really pay to be sitting on the sidelines and say maybe spurts go up ten basis points and then i will buy. We cant really time that move, as well. The home equities path we start to see a bit of a dip in the next couple weeks. Perhaps in february inflation day is a bit higher than expected. We saw at the start of the year, about 10 plus a setback in that looks increasingly likely simply because rates have repriced. Theyre Great Expectations are not as exuberant with the rate expectations already being much more realistic it is also unrealistic to us to say this is the factor that is going to send everything down we have to be more realistic a dip of a couple percent but you have to jump in really quickly there. I guess you mentioned a rate paths that Central Banks may take has been repriced a fair degree but how much do we actually need right easing by the fed . Do you think this is a steady as she goes economy right now and the rate structure is okay . To be on us the economy is pretty quiet in the u. S. Even in europe i would argue it doesnt really need an awful lot of upside surprises to me massively surprising to the upside not because the european economy so great but a lot probably not the first guy on the show to say, the eurozone economy doesnt look great. Germany looks like it is the six man of europe. Everyone kind of knows that. On a various set up we have the tiniest little bit with the upside surprises. That is a massive it is steady and she goes to me. The u. S. Is particularly relative to bearish expectations even in europe. That, tommy, tells me we dont need as much anything as the market has expected at the start of the year. Perhaps 2 to 3 rate hikes. I guess the market could take it as a bit of a disappointment if indeed the fled does get changed to two wickets only. That is a risk it is only really a temporary setback. As long as we are seeing a few recuts this year and the path of least resistance for races to go down that is good for growth and it is good for equity. Certainly has been so far. Max, appreciate the update. Thank you so much. Coming up, plug power shares are popping after dropping 10 earlier today. We will tell you what is behindh at big reversal next. Warren pies breaking down the final moments of this trading week. That and much more as we take you inside the market zone. Im jack black. Get tickets right now for kung fu panda. You dont have time for a drum solo. Get tickets [ screaming ] get tickets skadoosh. Get tickets is it possible to count on my internet like my Customers Count on me . It is with comcast business. Keeping you up and running with our 99. 9 network reliability. And security that helps outsmart threats to your data. Moaire dida twoo . Your data, too. Theres even roundtheclock customer support. So you can be there for your customers. With comcast business, reliability isnt just possible. Its happening. Get started for 49 a month. Plus, ask how to get up to a 800 prepaid card with a qualifying internet package. Dont wait, call and switch today power e trades awardwinning trading app makes trading easier. With its customizable options chain, easytouse tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. E trade from Morgan Stanley power e trades easytouse tools make complex trading less complicated. Custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. E trade from Morgan Stanley weeks or so we have seen some downgrades in recent weeks but the latest coming today from hyper sandler downgrading the stock because they say the slew of recent announcement gives them concerned that they could be more issues coming down the pike for this company and the uncertainty of course pressuring the chairs now down 26 a lot of this though will fall into there was a new ceo they have been appointed executive chairman they were assuming the top csuite role now to try to regain confidence that has been shuttered in this company in the investor based over the last month or so mike. The rest of the sector trading as if it is somewhat idiosyncratic, maybe not systemic. We will see if that proves to be the correct call. Leslie, thank you so much. Lets get to pippa on plug power. Look at this stop likes to move. What was behind today . Down 10 in premarket shading but now in the green. Plug power did eliminates a growing concern language from its annual filing last night saying it now has enough cash to Fund Operations for at least 12 months. That comes after the company sold roughly 300 million in stock as part of the one billion dollar at the market offering announced in january. Of course, that forced shareholders. The plug also notes q4 results with revenue light and margins a big miss. On the Positive Side the companies georgia facility is now producing a Green Hydrogen after months of delays and its forecast to reach full output by the middle of q to, plug power also expects to receive conditional approval for 1. 6 billion dollar loan from the d. O. E. Lpl office by the end of this month. Mike, as you said, this is a very volatile stocks. Hi shared interest and shares are down more than 70 in the last year. All right, pippa. Thank you very much. Warren, weigh in on what we have seen in the market this week but also coming into this week basically weve had people give up a lot of the stories for why the stock market can perform whether it was related to the fed, whether was related to earnings, or the concentration of the market. I know youve been giving the market more of a benefit of the doubt recently. Where does it bring us today with this close . Thanks for having me. I looked this week started all the way back it is a continuation of what we saw last november when the fed embarked on its verbal pivot and i think this kind of move was inevitable. At this point in time the soft landing came the base case and our view was there is just not enough buy in from investors. The beginning part of this year has really been more near term the market moved higher while rates also moved higher and bonds reset from that manic rally at the end of last year. We have proven that we can. And i think earnings have taken the baton from macro, which is what i will call the queue for raleigh. That is where we are a. Now the momentum is doing the rest. Strategists underway their targets are under what the market is that right now. That is usually bullish for the market despite the fact that we have rallied a lot. I dont see the typical euphoria. For me this is a catchup trade. I think a lot of people are being forced into the market. Kind of what we expected at the beginning of the year. Obviously we are at new highs with the indexes. Its not as if there is a certain level that we have to surmount to necessarily be the next test but when the market starts to run really fast it takes a little pebble to knock it off course. I wonder what you are more worried about. A little bit of an uptick in inflation or growth faltering at this point. That is a great question i think that is the two big risks. I would say growth is a bigger near term risk to the market. If you think about inflation, how is inflation hurting the stock market . It hurts the stock market by forcing bond yields higher. Eventually those yields disturb the relative valuation of markets. We went through an episode of that. The equity market just breezed right through that. What the market is telling me is they can handle a little bit of inflation, can handle the fed delaying these cuts. It would not be able to handle if the fed totally reversed course. I think growth is the bigger real concern. The market is telling us ultimately it can handle this inflation and delete cuts. As long as the flow through earnings i think stocks will ultimately be okay. The message theyve received from the fed from last november until now is the set has your back. If something were to go wrong on that roadside the fed can cut immediately and cutie and do whatever it is. Thats why going into the year yesterdays tightening becomes tomorrow stable. The fed has your back. It is back in play. It is a good reminder. 2 of the fed inflation target but the fed is pretty good a little bit above there. We do want to get you to weigh in quickly as wti crude now pushes 80. It has had a little bit of a stealth rally here. Again, we thought oil was set up for one push higher. I just dont see anything above 90 in the cards. My honest feeling my models to bullish in thats really how i navigate quantitatively. My honest feeling is as we go through this year opec will have to come back on the market. That is gonna weigh hard on the market. Opec is trying to navigate its own, engineer its own soft landing of the oil coming back onto the market. Odds are it will be somewhat disorderly and push prices down as we move through the year. Marginal pack meeting is where i think you will get some good news for the oil market. Probably extend cuts out to q two. Maybe they will top out into the year. I do not expect. That one way or the other than oil have come. Back it is sitting on top of the market like a soft ceiling. Thats how i look at it. That would be, i guess, good news in terms of the inflation risk, as well. Lauren, great to talk to. You appreciate it. Have a good weekend. As we look to finish out the week we are going out near the highs of the s p 500. Up about a tenth of 1 . Also up close to 1 for the week. We see the nasdaq positive at 1. 1 . They second straight daily new alltime high last one was 2021 we see the participation today about two thirds of all volume to the outside. That russell 2000 number of people are watching is just under 2100. It is up 1 . That is a sign we are starting to come down. We see some stocks. That is gonna do it for closing bell. Up next is overtime. [bell ringing] the record rally rows on, as we start march. That is the scorecard. But the action is just Getting Started. Welcome to closing bell, overtime. I am Morgan Brennan with john. Yeah, the s p 500, and nasdaq, closing at for the second straight day, as tech and energy lead the market higher, and nvidia a big part of that tech, raleigh with the chip maker, closing above two trillion dollars in market for the very first time its amazing it, only took eight months, one stop missing out of todays rally, which is under pressure